The Toronto Real Estate Board (TREB) blames a sluggish real estate market in May 2018 on the lack of available supply for prospective Greater Toronto Area home buyers.
New listings are down by 26.2 per cent year over year, indicating sellers are choosing to remain in their homes. Low inventory means that prices will continue to remain high and out of reach for most in the GTA.
But would they move if they could feel comfortable downsizing into a space that wasn’t a condo? That’s what TREB thinks.
“In a recent Canadian Centre for Economic Analysis study undertaken for the Toronto Real Estate Board, it was found that many people are over-housed in Ontario, with over five million extra bedrooms. These people don’t list their homes for sale, because they feel there are no alternative housing types for them to move into. Policy makers need to focus more on the ‘missing middle’ — home types that bridge the gap between detached houses and condominium apartments,” says Tim Syrianos, president of TREB.
Indeed, the condos for sale in Toronto do not offer much incentive to move. They tend to be tiny units, in buildings that may be mostly renter, instead of owner-occupied.
Although semi-detached houses and townhouses do exist, there’s not very many of them. Only 1,947 units were sold this May in the GTA, combined. Developers can make far more money building condos, as they can build more units with less land mass, and the lack of maintenance means they are popular with investors and speculators. Almost 2,400 condo units were sold in the GTA.
If policymakers could incentivize developers into building this “missing middle”, whether that’s row-homes, townhomes, stacked townhouses, or some other combination thereof, instead of trying to push extreme high-density living onto everyone, as Ontario policy currently favours, than it’s likely many would stop sitting on their detached houses and put them on the market.
That’s unlikely, however, to happen anytime soon. As it stands, the only options for most prospective buyers in the GTA is either a condo or a detached houses.
As detached houses remain over $1 million, the only available option for most, are condos, at $563,000. That’s likely why condos are still doing the best out of any market segment, and are the only type to show price growth — condos grew 5.7 per cent in the GTA, as detached declined 8.2 per cent, semi-detached 1.2 per cent and townhouses 2.5 per cent.
Check out the infographic below for more details:
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